Chancellor Alistair Darling has remained tough on the government's plans to cap public sector pay rises below inflation and slammed large bonus payments.
In a speech at the Trades Union Congress (TUC) conference in Brighton, Darling said that it would be damaging for the government to "allow inflation to become entrenched" as it had done in the past, and, therefore pay rises within the private and public sectors must remain consistent with inflation targets.
He added that public sector pay had increased by 39% since 2000, which, he claimed, was higher than pay rises in the private sector.
The chancellor also attacked large bonus payouts as being "excessive" and cited them as one of the main reasons for the credit crunch. "You're rightly concerned about excessive bonuses, especially when people seem to get money for failing not succeeding. And that's got to change. A bonus should be for hard work, not big mistakes. Excessive bonuses, which encourage traders to take excessive risks, at a time of easy global credit - one of the major reasons for the global credit crunch", he said.